The Ethereum blockchain is about to receive an important update on April 12th, namely the Shanghai Upgrade. The main purpose of this upgrade is to enable the extraction of Ethereum (ETH) already pledged on the Beacon Chain. Currently, over 17 million Ethereum coins are locked on the Beacon Chain, accounting for over 15% of ETH's total supply.How will this upgrade affect the price and market of ETH? We believe that from multiple perspectives, the upgrade in Shanghai is beneficial for ETH, for the following reasons:Enhancing the attractiveness of beacon chains Beacon chain is a core component of Ethereum's Proof of Rights (PoS) consensus mechanism, which enables Ethereum networks to be more secure, efficient, and environmentally friendly. Currently, to become a verifier of the beacon chain, at least 32 ETHs need to be pledged and cannot be extracted. For some users, this may be a high threshold and risk. After the upgrade in Shanghai, pledgers can freely extract their ETH and rewards, which will reduce the cost and risk of pledging, attract more users to participate in pledging, and increase the security and decentralization of the Ethereum network.Reduce the cost of second tier solutions
The Ethereum blockchain is about to receive an important update on April 12th, namely the Shanghai Upgrade. The main purpose of this upgrade is to enable the extraction of Ethereum (ETH) already pledged on the Beacon Chain. Currently, over 17 million Ethereum coins are locked on the Beacon Chain, accounting for over 15% of ETH's total supply.
How will this upgrade affect the price and market of ETH? We believe that from multiple perspectives, the upgrade in Shanghai is beneficial for ETH, for the following reasons:
- Enhancing the attractiveness of beacon chains。 Beacon chain is a core component of Ethereum's Proof of Rights (PoS) consensus mechanism, which enables Ethereum networks to be more secure, efficient, and environmentally friendly. Currently, to become a verifier of the beacon chain, at least 32 ETHs need to be pledged and cannot be extracted. For some users, this may be a high threshold and risk. After the upgrade in Shanghai, pledgers can freely extract their ETH and rewards, which will reduce the cost and risk of pledging, attract more users to participate in pledging, and increase the security and decentralization of the Ethereum network.
- Reduce the cost of second tier solutions。 The Shanghai upgrade will achieve some improvements, such as EIP-3074 and EIP-2537, which will reduce the gas cost of second tier solutions running on Ethereum (such as Polygon and Optimism), thereby improving user experience and efficiency. The second tier solution is an important way for Ethereum to expand and innovate, allowing more applications and transactions to run on the Ethereum network, increasing the value and demand of Ethereum.
- Increase market liquidity。 After the upgrade in Shanghai, pledgers can withdraw their own Ethereum and rewards, which will increase the supply of Ethereum in the market and may also bring about some price fluctuations. However, we believe that this volatility is short-term and will not change the long-term trend of Ethereum. On the contrary, this liquidity may stimulate more trading and investment activities, such as pledgers being able to use their ETH for other purposes such as lending, market making, trading, etc. These activities will increase the demand and utilization of Ethereum, thereby supporting its price.
In summary, we believe that the upgrade of Ethereum Shanghai is beneficial for ETH. It will showcase Ethereum's innovative capabilities and leadership position, and also bring more opportunities and choices to users and investors. It is recommended to pay attention to the progress and impact of Shanghai's upgrade, and decide whether to participate in pledging or investing in Ethereum based on one's own judgment and risk preference.
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
